LINEA -339.7% in 24 Hours Amid Sharp Volatility

On October 9, 2025, LINEA recorded a 339.7% decline in value within a 24-hour period, plummeting to $1.0631. Over the past week, the asset experienced a staggering 901.02% drop, while its monthly performance showed a 62.44% fall. However, over the last year, LINEA has demonstrated a 1145.48% surge, indicating a highly volatile trend across different timeframes.

The sharp decline has raised questions among traders and analysts about the underlying causes. Recent on-chain data suggests a significant outflow of assets from major wallets, hinting at potential liquidity issues or large-scale dumping by holders. The price movement appears to be disconnected from traditional macroeconomic factors or fundamental project developments. Instead, the drop has been attributed to rapid market sentiment shifts and speculative trading activity.

Technical indicators show LINEA is currently trading below its 50-day and 200-day moving averages, reinforcing a bearish trend. The Relative Strength Index (RSI) stands at an extremely oversold level, signaling potential for a short-term rebound. Nevertheless, the overall momentum remains bearish, with the MACD histogram showing continued negative divergence. These signals are typically used in backtesting scenarios to assess trade entries and exits.

Backtest Hypothesis

To evaluate potential trading strategies in the current LINEA environment, a backtesting hypothesis was formulated using historical price data. The strategy is based on a moving average crossover system, combining the 50-day and 200-day moving averages. A trade signal is generated when the 50-day MA crosses above the 200-day MA (golden cross) for a long position or below it (death cross) for a short position. The system is further refined by incorporating RSI as a filter—only entering long positions when the RSI is below 30 and short positions when it is above 70. The goal is to assess whether this approach would have yielded profitable outcomes during periods of high volatility like the recent 339.7% drop.